Amara Share Discussion Threads

[amargosa] 14/3/2016 16:11

boadicea, thanks, my ama shares are held in a Selftrade ISA; I've asked them to confirm the arrangements post merger but have not heard back as yet. I've tried a dummy buy of PRU shares on their platform but they don't even come up.

[amargosa] 14/3/2016 12:03

Anyone got any of these in an ISA? If so, has anyone had any confirmation yet on what this deal will mean for PRU ISA qualification?

[onedayrodders] 08/3/2016 10:50

decent post from another thread worth discussing ...

As at 31 December 2015, Perseus's gold price hedging included 120,267ozs of gold sold forward at a weighted average price of US$1,276/oz."

So they have over 50% of 2016 production hedged at $1276, not far above today's gold price. In this scenario they will make little on their hedging this year, and nowhere near the $23.6M they made hedging in 2015 (much of this profit was due to previous hedges at $1432and $1600).

Perseus's mining costs are rather high and have been rising. Their December 2015 Quarter although claimed to be exceptional was $1408, (and no $1408 is not a typo).

Gold Production & All-In Site Cash Costs
December 2015 Half Year - Gold Production 76,693oz @ $1208
June 2016 Half Year - Gold Production 95,000-115,000oz @$1,100-1,300
Financial Year 2016 - Gold Production 172,000 – 192,000oz @ $1,130-1,250

If production costs are at the top end of this years estimate of $1250 per oz, it will leave very little profit when sold at the hedge price of $1276. So 2016 earnings look like being far below those of 2015.

Amara's Yaouré mine is 18 months to two years away from production. Seeking Alpha claim it will "cost $334M to build the mine, and assuming a 40% equity requirement, Amara would have had to come up with $140M in cash". Perseus may well have the initial $140m, but if the gold price retraces it is difficult to see where the remaining $200m will come from without borrowing. They also have a mine of their own (Sissinge) to develop, which needs another $79m spent on it. This is currently being mothballed until the gold price rises.

I think that this is a great deal for Perseus whose high costs and low hedges mean they will struggle to make much of a profit for the next year or two at today's prices. They are gaining a very good low cost gold mine to add to their costly and declining portfolio. I do not believe that it is such a good deal for Amara shareholders, and expect they will see little return on their investment for the next couple of years.

[boadicea] 06/3/2016 15:33

I think many posters here are being unrealistic in their expectations.
We have a viable proposition for amalgamation with a company that has available capital committed to mining
The arrangement is based on PRU's shares which are arguably similarly underpriced to our own. There is therefore effectively no dilution apart from possible disagreement about the relative degrees of undervaluation.
Additionally, the A$ is currently weaker even than sterling, giving further potential upside.
The warrants are another sweetener.
I doubt that a significantly better offer will emerge.

[amargosa] 05/3/2016 11:44

I wonder how much of the dip under 10p was engineered.

[corrientes] 05/3/2016 09:44

if the controlling directors are offered a cushy number in the new company, and told to go through the motions of saying a counter bidder might arrive under the guise of appearing to be neutral, then you can expect the worst.

[john148] 04/3/2016 22:47

With the re-emergence of recessionary indicators and gold on the up I can't see how the Board can accept such a derisory offer.I wonder how much effort if any the Directors made in trying to get Perseus to up their bid ? Let's hope there is a counter bid.

[onedayrodders] 04/3/2016 16:36

Indeed you have to admire PRU's approach and timing.

[richgit] 04/3/2016 15:51

ODR

If time had been in our favour then at $1400 I reckon this stock
would be on its way to at least 65p.

How would a Capex of just $340Million look against a potential
of the first 5 years producing circa 230,000 ounces sub $700

At $1900 that would be circa $276 Million before expenses -and payback
within 2 years ?!!

How much could this spin off in the remaining 13 years + + + + + + + +????

A veritable Golden Goose of some magnitude,and a true money printing machine
beyond most people`s foresight when the days come that inflation takes Gold
to Planet Zog.



However a potentially massively undervalued Perseus + massively undervalued
AMA assets to boot = should work out even if the Gold Giants remain comatose.

[onedayrodders] 04/3/2016 09:47

Gold trying to breakout again.

If it can put another $100 move in the short term then PRU's offer which is already at "Boot Sale" level starts to look much less of a good deal, and should increase the counter offer chances at much higher levels.

A bidding war could not be ruled out if Gold moves up above $1400

Here's hoping

ODR

[corrientes] 04/3/2016 09:40

As business throughout the world contracts, there are few sectors that are likely to show growth for the foreseeable future. A surging gold price indicates one sector likely to spark a bit of interest. There's always money
available if the price and prospects are right, rather than money simply being tied up in a bank account gathering peanuts in interest because the opportunity cost isn't presenting itself.

With the AMA share price still suffering,I'd be very surprised if a counter bid doesn't come in soon. The PRU needs Yaoure quite badly. That doesn't mean AMA should bend over, not when you think that the risk reward ratio is moving very much in AMA's favour.

If PRU succeed, this will be one of the steals of the century.

[888icb] 03/3/2016 21:59

Gold now 1263. Come on counter bidders it's getting more valuable every hour!

[888icb] 03/3/2016 16:15

Gold moving above 1250.

[amargosa] 03/3/2016 09:56

RRS have had plenty of opportunity to do something - it's on their doorstep! Maybe they'll want it now because someone else wants it. Can the world really be like a kindergarten?

[rettah] 03/3/2016 09:36

There were some thoughts a while back that we would be a good target for Randgold.

[amargosa] 03/3/2016 09:09

No sign of the EGM yet either.

PRU trading at A$0.37, quite a bit off the warrant exercise price. If it drops any lower at the time of the EGM, that might raise a few eyebrows. Any counter bid would have to be very sweet as this all looks like a done deal. 25p+ perhaps needed?

[888icb] 03/3/2016 08:12

Article in Shares Mag says boss of AMA would not be surprised if there was a counter bid. Bring it on!

[onedayrodders] 02/3/2016 14:04

[...]


Amara agrees to takeout from Perseus


14:24 29 Feb 2016

Australia's Perseus Mining swoops on Amara Mining in a deal valued at 16p per share

Amara agrees to takeout from Perseus

Yaoure will produce upwards of 200,000 ounces of gold per year


West African gold specialists Amara Mining (LON:AMA) and Perseus Mining (ASX:PRU) have agreed to combine in a merger of not-quite equals, which will see Amara shareholders speaking for 35.1% of the enlarged company on a pro-forma basis.

Amara’s shares jumped just over 17% to 12p on the news, some way short of the notional 16.3p offer price, while Perseus shares, as is often the way for bidding companies, weakened by over 10% to A$0.37 in overnight trade on the ASX.

The thinking behind the deal is clear, on both sides.

For its part, Perseus is well established in the ranks of the mid-tier gold producers and is looking for growth in a market which is unforgiving of second-rate assets.

As one of the largest undeveloped gold projects in Africa with more than seven million ounces to its name, Amara’s Yaoure project gives Perseus a serious growth profile that’s almost unmatched amongst its mid-tier peers.

For its part, Amara has always recognised that it was going to need a bit more muscle on side if it was ever going to get Yaoure built.

The company has just upgraded its pre-feasibility numbers, and these came in attractively enough. The current model shows Yaoure producing average annual production of 248,000 ounces over the first five years of its life, and an average of 203,000 ounces over its full 15 year life.

Head grades, at 1.62 grams per tonne, aren’t too bad either.

But there was always the small matter of finding the up-front capital cost of US$334 million that would be required to get Yaoure built.

Sure, at all-in sustaining costs of US$664 per ounce, the project looked viable enough. But equity markets have had a bellyful of gold development stories at the moment and that sort of funding package was always going to look like a tall order, however much refinement Amara was able to achieve.

With existing production of over 200,000 ounces per year already to its name, Perseus can approach Yaoure from a slightly different standpoint. For one thing, development is not make or break for it, so it can afford to take its time and get the funding package right.

For another, it actually has cashflow and profits and can arguably afford to stump up a much larger portion of the development costs from its own resources.

The timing of the deal, just days after the latest pre-feasibility numbers for Yaoure were announced, is unlikely to be coincidence either.

Perseus was clearly seeking comfort as to the returns on offer, and in a strengthening gold market, clearly liked the 38% IRR and US$555 mln NPV that is on offer, at an 8% discount and assuming a US$1,200 gold price.

A few short weeks ago, that gold price would have looked aggressive and unrealistic. Now, with the gold price at US$1,229, it looks if not conservative, at least reasonable.

Of course, there are still various approvals to be sought and attained, including the approval of Amara’s own shareholders.

But this offer is recommended, and key shareholders have already indicated that they will support the deal.

On completion of the deal, Amara’s chief executive John McGloin will join the Perseus board. It’s not stated what will happen to Amara’s highly-rated finance director Pete Gardner.

Alastair Ford
  

[onedayrodders] 02/3/2016 11:51

what particular Jesse Livermore advice are you referring to

[the count of monte_cristo] 01/3/2016 21:06

Next AIM resource company on my radar of being taken out, MNC. Its basically a one way bet with these bombed out resource stocks from here....many of us have sat through the pain of losing 90% of the value of our portfolios over the last 4 years, through bitter endurance and fortitude we learn the hard way. However...I think 2016 will be a much better year for the mining stocks.

During the initial phase of buy outs in a bombed out sector bargains are had...before the sector slowly increases and prices per oz/kg of in the ground resource increase....over the course of time they usually end in a bubble. This is THE bottom, Imho.

Jesse Livermore was right about a lot of things. His advice which is almost 100 years old now still stands.

[onedayrodders] 01/3/2016 16:32

I'm voting for the deal .. whilst my initial reaction was like most .. "is that all" I don't think from a market perspective the belief in the Gold price is quite there yet and we could only expect a bigger offer in Gold frenzy and a move in Gold as seen in 2009.

I believe that will happen and in the interim this gives us a chance to own a low cost producer of a 500,000 ounce per year by 2020.

World class mines of this size are in short supply and rarely found these days.

ODR

[onedayrodders] 01/3/2016 12:47

Warrants will soon be in the money

Perseus Mining Ltd
ASX: PRU - 1 Mar 16:10 GMT+11
0.40 AUD Price increase0.03 (8.11%)


;o)

[amargosa] 01/3/2016 10:22

The Aussis can ramp with the best of them. Interesting reading on the Hot Copper site.